00 competitiveness stratategy & productivity

1. Overview of Competitiveness,
Strategy &Productivity
Dr. T. T. Kachwala

2. Overview of Competitiveness, Strategy
& Productivity
 Competitiveness
 Operations Strategy
 Productivity – Definition, Measures of Productivity,
Methods of improving Productivity.
 Video (McDonald’s “Made for You”)
 Productivity in Service Sector
Slide 2

3. Competitiveness
 Competitiveness: How effectively an organization
meets the wants and needs of customers relative to
others that offer similar goods or services
(Exercise)
 Competing using Marketing: Identifying Consumer
wants and needs, Pricing, Advertising and
Promotion (SWOT – O & T)
 Competing using Operations: Product and Service
Design, Cost, Location, Quality, Quick response,
Flexibility, Inventory Management, Supply Chain
Management, & Services (SWOT – S & W)
 Two basic issues :–
 First: What do the customers want?
 Second: What is the best way to satisfy those wants?
Slide 3

4. Operations Strategy
 Operations strategy: The approach, consistent with
organization strategy, that is used to guide the operations
function.
 Examples of strategies: Low cost, Scale-based, Specialization,
Flexible operations, High quality, & Service
 Quality-based strategies: Focuses on maintaining or improving
the quality of an organization’s products or services for both
attracting & retaining Customers
 Time-based strategies: Focuses on reduction of time needed
to accomplish tasks
 What are the strategies of World Class Companies?
Slide 4

5. Definition of Productivity
1. The term Production is absolute. While the term
Productivity is relative (output relative to input)
2. It is ratio of output & input
i.e. Productivity = (Measure of output) / (Measure of input)
3. Productivity can be defined as incremental change in output
for a unit change in input.
Slide 5

6. Measures of Productivity
1. Partial Measures
1. Labor productivity = Output (units) / Labor (hours)
2. Material Productivity = Output (units) / Material (kgs)
3. Machine Productivity = Output (units) / Machine (hours)
2. Multifactor Productivity Index = Output (units) / (Labor + Material + Machine)
3. Total Productivity Index = Output (units) / (All inputs used)
Slide 6

7. Methods of improving Productivity
1. Increase the output for the same input (Quality
Management)
2. Decrease the input for the same level of output
(Reducing Wastage)
3. Small increase in input resulting in a
substantial increase in output (Capital
Investments in new facilities)
Slide 7

8. Productivity Gains at Whirlpool
1. The plant is competing against the foreign
manufacturers with much lower labour cost
2. The issue really is the labor content and the product
i.e. Labour Productivity
3. Productivity at Whirlpool – 139% of the average of
the industry, and rising by about 5% per year
4. Whirlpool uses gain sharing program called
performance share & promises employees no job
loss because of productivity gains
Slide 8

9. Productivity in Service Sector
1. More difficult to measure & manage because it involves
intellectual activities & high degree of variability: for example
medical diagnosis, consultancy & legal services
2. Some of the factors that affect Productivity are Methods, Quality,
Technology & Management (McDonald’s “Made for You”)
3. Standardizing Processes & Procedures where ever possible to
reduce variability can improve Productivity & Quality: for
example Burger Kings combined menu items in meal packages
such as a burger, fries & soft drink which reduced time to take
and process the order & this resulted in increased productivity
Slide 9

10. Thanks and Good Luck
Have a nice Day
Dr. T. T. Kachwala